Should a minimum wage hike happen?

Dec 19, 2012
30
0
#1
In this economy, it seems like it would be difficult to raise the minimum wage without companies having to resort to layoffs, cancellation of expansion plans and/or cutting hours. On top of Obamacare, companies have to have even higher labor costs.

There are many unintended consequences of such anti-poverty measures, such as higher unemployment, less opportunities for youth and those with no skills and states becoming less competitive.

What do you think? I ask because 10 states will be raising the minimum wage as of Jan. 1, 2013.
 
Oct 25, 2012
3,775
614
Louisville, Ky
#2
In my opinion, wage control should be in the best interest of a company...happy workers and all that. Unfortunately, our society has created a new form of Capitalism that dismisses the long term in favor of short term interest.
 
Jul 26, 2009
5,666
406
Opa Locka
#3
In my opinion, wage control should be in the best interest of a company...happy workers and all that. Unfortunately, our society has created a new form of Capitalism that dismisses the long term in favor of short term interest.
Agreed. My company could pay every employee $20/hr and still turn a multi-billion dollar profit... I'm not saying that everyone deserves that kind of pay but the math forces a person to consider how fair the pay scale is.
 
Dec 20, 2012
677
12
Florida
#4
I owned a business for 12 years. I paid my sales people (in commissions) the equivalent of about $150/hour. I still did just fine. My biggest problem wasn't how much money wqs going out. It was how much money was not coming in. Every day I had to listen to prospective customers tell me on the phone that they like the whole idea of my service (a video dating service in the 1980s), BUT they couldn't afford it. When I asked how much they could put up for a down payment, they often answered "Uh 10 bucks". Know why this was happening ? It's because somebody out there was paying them minimum wage, that's why.

SO the less the minimum wage payer companies are paying these people, the less money they have to buy the things YOU are trying to sell. Conversely, if the MW were MUCH higher, they would become able to buy from you, and your sales and income go up.

And let's not forget that there are millions of businesses who don't pay any wages at all. They pay only commissions. For them, a raise in the minimum wage is only a GAIN, with no loss at all (car dealerships, furniture sales, etc). Likewise, for companies who only have skilled workers already making well above what the MW would be raised to (ex. machine shops), they can only GAIN from a raise in the minimum wage. For them, the low minimum wage is the problem.

I remember damn near begging my state legislators to raise the state minimum wage, to get the levels of community disposable income up (and my sales) up.
 

chris7375

Secretary of State
Jun 11, 2012
740
8
Stuart
#5
I do think there should be a minimum wage but no matter how much you raise this wage some of those jobs can be moved to cheaper parts of the world.

The problem is and always will be becoming Global. I myself am against this move and say we need to protect our own. To move to a global economy will destroy many of those industrial countries and we have already seen the effects.

We need to pull out and start making American again and letting others know we are only going to worry about our people and not the world in general.
 
Jul 26, 2009
5,666
406
Opa Locka
#6
I do think there should be a minimum wage but no matter how much you raise this wage some of those jobs can be moved to cheaper parts of the world.

The problem is and always will be becoming Global. I myself am against this move and say we need to protect our own. To move to a global economy will destroy many of those industrial countries and we have already seen the effects.

We need to pull out and start making American again and letting others know we are only going to worry about our people and not the world in general.
We don't need to start making American 'again'. We never stopped making American, indeed the manufacturing sector has never been bigger. The issue isn't that jobs are being outsourced (India actually outsources their jobs to America :p), it's that human labor is obsolete. It's cheaper to hire 3 engineers to do IT work in an automated factory then it is to hire, train and retain 1,000 human workers. When you hear of a factory closing odds are (unless the company that owns it has gone under) that an automated factory is taking over it's production. The idea that jobs are being 'stolen' is due to politicians having an easier time getting votes blaming dirty foreigners then telling their constituents that they're no longer useful as labors.
 

chris7375

Secretary of State
Jun 11, 2012
740
8
Stuart
#7
We don't need to start making American 'again'. We never stopped making American, indeed the manufacturing sector has never been bigger. The issue isn't that jobs are being outsourced (India actually outsources their jobs to America :p), it's that human labor is obsolete. It's cheaper to hire 3 engineers to do IT work in an automated factory then it is to hire, train and retain 1,000 human workers. When you hear of a factory closing odds are (unless the company that owns it has gone under) that an automated factory is taking over it's production. The idea that jobs are being 'stolen' is due to politicians having an easier time getting votes blaming dirty foreigners then telling their constituents that they're no longer useful as labors.
Yet statistics say otherwise. I read a report that states otherwise and will try and find the link for you and post it so you can read it at you leisure.

The other thing i have is these site s that also say differently.
http://intellectualyst.com/10-5-million-american-jobs-have-been-outsourced-643/
Follow the links the site provides to gain a list of companies that have out sourced work.

Also this link that states otherwise.
http://thinkprogress.org/economy/2011/04/19/159555/us-corporations-outsourced-americans/?mobile=nc

When you go to a store the products you buy are not made in America for the most part. They are produced in China, Korea, Thailand Why? They are produced there because labor is far cheaper there then it is producing in the U.S..

We are reinventing ourselves maybe we are but is it for the better I don't think so, I feel globalism will destroy many nations. We conform to much to what is asked of us and we shouldn't.

I would have to disagree with you on this. Those jobs outsourced that were once in the U.S. are only partially automated. Automobiles that were once produced in the U.S. are now produced in Mexico, among other places.

I wish I could see what you see but I don't sorry.
 

myp

Site Founder
Jan 14, 2009
5,841
50
#8
While David raises some valid points, we aren't quite there as you said Chris. Automation is only part of the story, but will likely be a bigger and bigger part moving forward. David is a very enthusiastic futurist, so he likes to think we are years ahead of where we actually are sometimes :p

As for the question at hand- the literature was long in favor against a minimum wage at all, but some newer studies are suggesting certain conditions in which it might be a good thing. I am still of the general persuasion that a minimum wage is generally, but not always harmful, especially when it leads to increased unemployment and possibly greater employment discrimination.
 

chris7375

Secretary of State
Jun 11, 2012
740
8
Stuart
#9
While David raises some valid points, we aren't quite there as you said Chris. Automation is only part of the story, but will likely be a bigger and bigger part moving forward. David is a very enthusiastic futurist, so he likes to think we are years ahead of where we actually are sometimes :p

As for the question at hand- the literature was long in favor against a minimum wage at all, but some newer studies are suggesting certain conditions in which it might be a good thing. I am still of the general persuasion that a minimum wage is generally, but not always harmful, especially when it leads to increased unemployment and possibly greater employment discrimination.
Everyone is allowed their opinion :D. I just may not agree with it all the time.
 
Oct 25, 2012
3,775
614
Louisville, Ky
#11
Excellent synopsis of a complex issue...particularly the way a labor market functions.

Likely, the net benefit to economic activity would be helpful. And the chick flippin' burgers would buy more sexy pants.

Reason Enough.
 
Jan 10, 2013
16
0
New Jersey
#13
It is good that those states are raising the minimum wage. Companies made a lot of money in 2012, but they do not want to increase wages, as it lowers their bottom line.
 
Oct 5, 2012
281
18
Flower Mound, TX (In the basement.)
#15
Why is government in the wage control business anyway? Wages should be the sole purview of private industry.....that's management and labor, no government dictates.
 

myp

Site Founder
Jan 14, 2009
5,841
50
#16
Why is government in the wage control business anyway? Wages should be the sole purview of private industry.....that's management and labor, no government dictates.
Depends on what the goal of government and society is, I suppose.
 
Jan 6, 2012
1,975
4
Texas
#17
Why is government in the wage control business anyway? Wages should be the sole purview of private industry.....that's management and labor, no government dictates.
I could type out something really clever, but sometime beat me to the punch, might as well just quote him

In my opinion, wage control should be in the best interest of a company...happy workers and all that. Unfortunately, our society has created a new form of Capitalism that dismisses the long term in favor of short term interest.
The last sentence is very eloquent.
 
Dec 20, 2012
677
12
Florida
#18
2 reasons to not raise the minimum wage: Two Reasons Not to Raise the Minimum Wage - Bloomberg

(and unemployment is NOT one of them) - this is a good read that considers the literature and shows why the political arguments of the Dems and GOP are both flawed (go figure :p)
The Evan Soltas article in Bloomberg View is flawed in at least one respect. It is in the last sentence of this paragraph.

"It is less clear, though, that a higher minimum wage would do anything to boost economic activity. A study by the Federal Reserve Bank of Chicago did find that it would increase consumption: For every $1 increase in the minimum wage, households with minimum-wage workers increased spending by $800 per year. Almost all of these gains, however, come from the interaction of income redistribution with savings rates. Since high-income households save more of their income than low-income households, income redistribution tends to shift savings into consumption. That has ambiguous effects on economic growth."

When there is less savings than consumption (ie. folks buying things in the stores), that is not an ambiguous effect on economic growth at all. It is a clear-cut, very, POSITIVE effect on economic growth. It IS economic growth. >> ie. more sales$$$ in the stores (AKA the economy).
 
Jul 26, 2009
5,666
406
Opa Locka
#19
The Evan Soltas article in Bloomberg View is flawed in at least one respect. It is in the last sentence of this paragraph.

"It is less clear, though, that a higher minimum wage would do anything to boost economic activity. A study by the Federal Reserve Bank of Chicago did find that it would increase consumption: For every $1 increase in the minimum wage, households with minimum-wage workers increased spending by $800 per year. Almost all of these gains, however, come from the interaction of income redistribution with savings rates. Since high-income households save more of their income than low-income households, income redistribution tends to shift savings into consumption. That has ambiguous effects on economic growth."

When there is less savings than consumption (ie. folks buying things in the stores), that is not an ambiguous effect on economic growth at all. It is a clear-cut, very, POSITIVE effect on economic growth. It IS economic growth. >> ie. more sales$$$ in the stores (AKA the economy).
I agree. It seems he was equating personal wealth with economic growth rather then actual economic activity.
 
Aug 7, 2010
211
40
Cliffside Park, NJ
#20
2 reasons to not raise the minimum wage: Two Reasons Not to Raise the Minimum Wage - Bloomberg

(and unemployment is NOT one of them) - this is a good read that considers the literature and shows why the political arguments of the Dems and GOP are both flawed (go figure :p)
MYP & A777 Pilot, opponents of the federal minimum wage, (FMW) believe the federal minim wage rate is a primary or particular driver of the U.S. dollar’s inflation; that falsehood is one of their rationalizations to support their predisposition to oppose the FMW rate.

Modifications of the minimum rate is determined by U.S. Congressional acts and due to politics those updates of the rates are usually, (if not always) lag behind the inflation rate of the U.S. dollar. Thus minimum rate’s contribution to inflation is generally less than that of enterprise’s other price increases due to the fact that their reaction to market forces can be, (and often is) immediately enacted.

Opponents pretend that minimum wage only affects the very poorest of the working poor. Except in the cases of jobs requiring labor that’s in short supply, all wage scales are related to each other; (i.e. the tide raises all boats). The minimum wage’s relationship of ALL wage and salary rates (but excluding jobs with labor shortages), is inversely related to the differences between the minimum and the jobs’ rates. Thus the minimum rate has significant affect upon USA’s lowest quarter of our entire employee population.

Opponents object to the minimum rate intervening between employee- employer negotiations. There’s no intervention, there’s the same legal minimum for all tasks but no maximum upon any pay scales.

Opponents believe that the absolute poorest of the working poor’s wages should, (similar to other goods and product services), be subject to the free competitive market.
There are fewer employers and more unskilled job applicants. There is rarely if ever a shortage of unskilled labor. Employers can delay some tasks until they can be performed at lesser cost.

It’s contended that the unskilled labor markets’ are less than flat equitable market; the FMW rate is justified and its elimination would be detrimental to our economy.

It’s further contended that to the extent our FMW rate does not keep pace with the U.S. dollar’s inflation, it is adverse to our economy. The minimum rate should be annually updated in the same manner as we now update social security retirement s. Those benefits remain subject to our three federal branches government but rather non-partisan statisticians annually apply explicitly drafted formulas to determine their updates.

The FMW in 1968 was $1.60/Hr. Applying the cost- price urban index to that, it was equivalent to $10.69 in 2013 dollars. The minim rate should be increased gradually but $9/Hr is a low ball rate. I advocate for five years a dollar be added to the minimum rate and prior to the index being applied. After five years, only the index will be applied to the minimum rate.

Respectfully, Supposn
 
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